Temu’s parent company has shifted its headquarters to Ireland to shield its expanding global ecommerce arm from escalating US-China tensions.
PDD Holdings, which owns Chinese discount ecommerce site Pinduoduo and its global equivalent Temu, has listed Dublin as its “address of principal executive offices” in recent US exchange filings, changing its location from Shanghai.
The move underscores the growing importance of the Temu marketplace, which PDD launched in the US in September following the explosive popularity of fast-fashion giant Shein.
“Temu wants to avoid geopolitical risks. The US is attacking Chinese companies and this will only get more severe,” said Li Chengdong, founder of Dolphin, a technology-focused think-tank in Beijing.
Analysts said PDD was pre-emptively realigning its corporate structure to protect Temu from any escalation in Washington’s offensive against Chinese tech groups.
The decision comes after ByteDance moved its TikTok operation to Singapore in response to Washington’s concerns about Chinese ownership of the popular short-video app. Last year, Shein made its Singapore subsidiary its de facto holding company and has been aggressively hiring in the city state.
PDD did not immediately respond to a request for comment.
Shifting the company’s headquarters to Ireland has tax benefits and could smooth the path to any listing of the Temu business.
“One possibility is that PDD is paving the way for Temu to list overseas. If so, a headquarters in Ireland or elsewhere in Europe may fit the exit requirements for investors,” said Eugene Weng, a Shanghai-based attorney at Wintell & Co, who represents Chinese companies listed overseas.
Weng added that establishing a headquarters in Ireland would make co-ordinating tax issues with European countries and the US easier. Temu is hiring legal counsel and trade compliance officers in Dublin, according to posts on the recruitment site LinkedIn.
Ireland’s low-tax regime has attracted a string of multinationals, including tech giants Google, Facebook and Amazon, which have all set up their European headquarters there. TikTok has also increased its presence in Dublin and hired more than 1,000 people in 2020.
PDD generates the bulk of its revenue from online marketing services on its Chinese ecommerce site but has invested heavily in launching Temu as it diversifies away from a cooling domestic economy.
It has pledged to invest $1.4bn to help Chinese brands grow their presence overseas and has introduced a range of sweeteners to encourage merchants to sell on Temu.
According to third-party data provider YipitData, Temu generated $862mn of gross merchandise revenue in the first three months of 2023. The Financial Times has previously reported that Shein generated $22.7bn in revenue last year.
Experts said PDD’s core operations would remain in its home market. The bulk of its nearly 13,000 employees are in mainland China.
“PDD’s business is still in China,” said Le. “There is no need for it to become a foreign company.”
